The Principle of Good Faith: Toward Substantive Stakeholder Engagement

Turning Farmers into Business Partners through Value Co-Creation Projects. Insights from the Coffee Supply Chain

“…Under this logic, a direct link exists between stakeholder value co-creation and creating the conditions that will allow all groups to express their voices [7] and to contribute fairly to the value creation, especially when cross-sector partnerships include stakeholders who are in a position of limited power [7]. That is why empowerment-the process through which low-power stakeholders acquire resources, knowledge, and skills to gain influence over events and other important matters [24][25][26]-is crucial for such stakeholders to fully participate in the value co-creation process and to make a greater and more significant impact on the supply chain.…”

“…The literature on empowerment reveals that the development, creation, and transfer of specific capabilities, skills, and knowledge can contribute to improving the condition of low-power, vulnerable stakeholders within the supply chain and create the basis for such stakeholders to actively take part in and benefit from value co-creation projects [7,8,38,39]. In particular, the main empowerment processes are related to (i) the strengthening of collaborative advocacy [40]; (ii) the creation of organizational structures and cooperatives to strengthen decision-making processes and favor collaborative governance [9,41,42]; (iii) the favoring of cooperation and dialogue both among low-power stakeholders and between low-power and more powerful stakeholders in order to increase awareness [23,43]; (iv) the intensification of training to increase competences [38]; (v) the improvement of adaptability practices [44][45][46][47]; and (vi) the favoring of new business creation and entrepreneurial solutions [48].…”

“…Globalized supply chains have increased in both complexity and vulnerability in recent years [1][2][3][4] for several reasons, including growing outsourcing [5], redistribution of resources and power inequalities [6][7][8], stakeholders' interdependent linkages and tangled relationships [9], and cultural and geographical barriers that create differences in knowledge, understanding, and relational influences [10]. Firms at the center of such complex mechanisms of relationships, sourcing, and production are thus required to develop and implement strategic actions that can anticipate and overcome vulnerability factors to increase supply chain resilience while continuing to create value for all stakeholders [2,[11][12][13].…”

“…Regulation of the evolving linkages throughout the supply chain imposes the prioritization of resources and the identification of groups of stakeholders who are critical for value co-creation and can contribute to supply chain resilience with their own resources, capabilities, skills, and knowledge in cooperation with the firm [18]. This study of the coffee supply chain has focused on low-power, vulnerable stakeholders [7,19,20] who work as coffee extractors in the coffee business. This is a long, complex, and idiosyncratic supply chain in which low-power stakeholders face issues such as climate change and market instability within greater asymmetries of information.…”

“…The supply chain also relies on the same people for the quality of the coffee and business survival [21][22][23]. In the context of this research, "low-power stakeholders" are smallholder coffee farmers who are unable to "sanction or modify activities that affect them" [7] (p. 285) and who "exercise direct influence on corporations" [10] (p. 432); at the same time, they are critical resource providers [18] for raw material quality and business productivity.…”